Trends in the US Wine Industry in 2013 – Cautiously Optimistic

Each year in January we are blessed with multiple reports on the state of the wine industry from such esteemed research bodies as Shanken’s Impact Databank, the Wine Marketing Council, Nielson,Silicon Valley Bank, and Unified. This year the news is similar to 2012 in that most experts are cautiously optimistic of numbers and trends that continue to skew positive but without any large changes. In general, the economy is better, but people are still cautious.

Wine Sales in the US

For the 19th year in a row wine sales have continued to grow in the US market, at a rate of 2.9% in 2012

The US is the largest wine consuming nation in the world with more than 100 million people now drinking wine, out of a total population of 316 million.

Per capita wine consumption in the US hit 3.08 gallons in 2012.

The US is the world’s largest wine market in terms of revenue, with consumers buying more than 360 million cases of wine in 2012, up 2% from 2011.

In 2012 total wine sales in the US reached $34.6 billion, a 6% increase
from 2011.

The US still imports almost 30% of all wine sold in the country.

Growth in on-premise wine sales is flat, but retail wine numbers are strong at $13.3 billion in 2012 (Nielson)

Online wine sales are finally coming into their own, with 74% of consumers purchasing wine from winery websites and 68% from Wine.com. Wine e-commerce has grown 15% overall since 2011.

More wine is being sold in drug stores and other chains such as Walgreens and Dollar General.

US Wine Consumer Characteristics

Of all US wine consumers, 57% are now core (those who drink wine at least once a week or more often) and 43% are marginal (drink wine less often than once a week, but at least once a quarter).

In terms of gender, 55% of American wine consumers are women and 45% are men, with more men adopting wine over the last decade

People are drinking wine more often in different occasions and settings.

80% of people talk about wine on Facebook and 40% chat about wine on Twitter.

Babyboomers are still spending the most on wine, but Millennials (ages 21 to 36) continue to adopt wine in high numbers with more than 15,000 per day coming of age.

The Hispanic population is growing very fast in the US with a forecasted population increase from 16% today to 30% by 2050. There is a concern that wine is not doing enough to embrace this population, while beer and spirits are.

Trends in Wine

The hottest varietals are still moscato, malbec and sweet red blends. Some producers are now experimenting with sweet white blends.

Chardonnay is still the most widely purchased wine varietal with cabernet sauvignon as second. American consumers also still enjoy pinot grigio, sauvignon blanc and rose, but there have been further decreases in syrah and white zinfandel sales.

Americans still enjoy buying wine from Argentina, New Zealand and Spain, but wine purchases have declined from Australia and Germany.

The sweet spot for wine pricing is $10 – $14.99.

Some wineries have suggested they need to raise prices due to a global grape shortage situation, but retailers are concerned that consumers are not yet ready for price increases.

Beer is growing faster than wine, with many consumers intrigued by beer’s new flavors, cider, malts, and artisan brews. There is concern that wine needs to do something new, e.g. new varietals, new packaging, etc.

I am glad to see you have summarized all the important annual reports about the trends in the wine industry. I am currently writing a thesis to finish up a Masters in Spain about difficulties that some Spanish wineries have exporting most specifically to the USA and to China. I would love to use the stats that you have mentioned here in my introduction to the thesis, however I can’t source a wordpress website, even if it is written by a Professor in a recognized university. Is there any way to get a hand on any of these reports (Shanken’s Impact Databank, the Wine Marketing Council, Nielson, Silicon Valley Bank, and Unified) without having to pay thousands of dollars?

Thanks for the concise statements Liz. I am writing the State of the Industry report for release in middle January as we speak. Can you tell me where you got the stat of 15k Millennials turning 21 each day? I could be wrong but when I did the math from Government sites, I came up with 10k a day Millennials becoming of age, and 10k Boomers retiring each day.

Thanks. I went back to check my math with the Census Bureau information. Its actually 14k Millennials coming of age right now and about 12k Boomers retiring. (Age & Sex Composition: 2010 Survey) Good thing I double checked!

Great article. If the US Wine Market is $36.3 Billion, then out of that what dollar value is sold on-premise compared to off-premise? I operate a site at http://www.vinoservant.com. I review restaurant wine lists. I take a list and point out the best values on the list, provide a tasting note, prices at other restaurants, and where it can be purchased on the retail level.

Great question, and one that is not that easy to answer because it is difficult to track on-premise wine sales to the detail level necessary. However, there are a few new companies, including GuestMetrics, that are starting to do this. In general, however, 80% of US wine is sold off-premise, with around 17.5% on-premise, 2% direct to consumer, and another 1.5% online. Obviously these numbers fluctuate, but in general, they seem to hold true overtime.

Liz – we traded some emails in regards to on-premise wine sales. Below is a link to an article I wrote for Wines & Vines. It talks about how wineries and distributors need to take the lead and provide “Suggested Restaurant Wine Prices.” These large price disparities from wine list to wine list are potentially damaging to a wine brand, as consumers may blame the winery rather than the restaurant.